If the economy is growing, shouldn't tax revenue be increasing?

(Bloomberg) -- U.S. state tax collections fell the most in 46 years in the first three quarters of 2009 as the recession shrank revenue from sources including personal income, the Nelson A. Rockefeller Institute of Government said.
Revenue dropped 13.3 percent, or $80 billion, compared with the same nine months of 2008, to $523 billion, the institute said. Collections in the third quarter alone sank 10.9 percent to about $162 billion, according to the report released today by the Albany-based body.
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The first three quarters of 2009 were the worst on record for states in terms of the decline in overall state tax collections, as well as the change in personal income and sales tax collections.
Budget gaps have opened in 31 states since fiscal year 2010 began, Dadayan and Boyd wrote, citing a National Conference of State Legislatures study.
“The great recession hit virtually every single source of tax revenue and pushed a number of states to revise revenue forecasts numerous times throughout fiscal 2009 and 2010, with significant impacts on services,” Dadayan and Boyd wrote.
State income tax revenue was down 11.8 percent in the third quarter, sales tax collections were down 8.9 percent, and corporate income tax declined 22.6 percent, according to the study.

If there is one consistency concerning government statistics and records, its that tax records are always the most accurate and complete. So why are tax revenues dropping across the board if the economy is recovering?

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they expanded the write off of past years or future losses to current returns for businesses. I'm not sure the exact terms but basically one has a larger window for write offs thus lowering the business tax bill. I'm positive this was for all business entities, C-corp. to sole prop.

in terms of total revenues, what is the percentage from W2 withholdings? That will tell us a lot and with 10% official unemployment, unofficial at least 17.2%, if most revenues come from W2, well, there ya have it!

I have no idea on federal, state, sales taxes, etc. what the break down is in revenue streams, by percentage. (I guess we should get a handle on that one? I don't actually). A post TBD?

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I would strongly wager that it's all fantasy accounting from here on in, much like those major variances in the BLS data and the discrepancies between BLS and ADP unemployment data (somehow I far more trust the ADP hard data than the massaged BLS data and there is some obvious correlated data between the hits which private healthcare insurers have taken, and continue to take (due to ongoing reduction in workforce) and that ADP data, little actual correlation to BLS "data").

With the massive securitizations backing all those private equity leveraged buyouts (many of for-profit hospitals, due around 2014, "coincidentally," of course!) together with the reduction in tax base due to unemployment, stemming from those LBOs as well as various other types of jobs offshoring, ever increasing bankruptcies, etc., all that GDP growth still appears to be ever growing debt.

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those economists who wrote about it, the primary category which they measured unemployment then was an approximation of every able bodied, adult American male, who was actively seeking fulltime work but couldn't find any.

Today, thanks to Reagan, the military is counted on the employment roles, thus skewing the numbers.

Also, we the BLS consistently lowering the actual numbers by claiming that a specified number have "given up" looking for employment.

Clearly, when the percentage receiving unemployment benefits have exhausted them ("officially" supposed to be half of the unemployed), when a certain number become homeless, are living in their cars or RVs, or coach surfing among their relatives and friends, it is highly doubtful they have "given up."

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